Page 10 - Week 01 - Tuesday, 14 February 2006
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defamation, clause 121 of the bill removes that right. This will have a negative impact. Corporations need to have the right to defend themselves against false, dishonest and malicious campaigns by individuals and groups, just as I believe individuals should have that right.
Under the current law a corporation claiming defamation has had to show that the statement concerned impugns its commercial reputation and that it has caused financial harm, and that has been confirmed in the matter of Kay v. Chester. Generally a statement that is defamatory is that of a kind that will lead ordinary reasonable people to think less of the person about whom it is made. Again, that is a principle enshrined in the decision of the matter of Consolidated Trust v. Brown.
The value of a corporation’s reputation should not be underestimated, nor should the damage that defamatory statements can inflict on that reputation. Just as individuals need the right to sue for defamation to protect their good name so, too, corporations need an avenue to protect their reputation and trust within the community. The brand value of Microsoft, for example, is estimated to be $80.8 billion. The impact in monetary terms that a serious defamatory statement could have on that value is immense. Similar situations could be seen with many other companies, particularly in the food sector, where these offences occur more frequently, and where there is enormous value attached to the commercial entity’s name. Whether it is Coca-Cola or McDonalds or a raft of other well-known corporations, a massive amount of value is recognised in the brand name.
Alternatively, even for smaller corporations, a business reputation is the foundation on which the entire business is built. The impact on, for example, a small local car dealer of a widely published false defamatory statement could be quite considerable. One would think that such a dramatic shift in the law must have been prompted by a significant number of actions commenced by corporations. In fact, there is very little litigious history of corporations using the right to sue for defamation in Australia. So the logic used for such a shift is flawed and simplistic.
I take you to some comments made recently by Mr Hugh Morgan, President of the Business Council of Australia. In an article he wrote:
There is more than a hint of hypocrisy in the calls of state governments to remove the long-standing right of corporations to sue for defamation.
On the one hand, we have state governments wishing to ensure the corporations have a good corporate reputation.
On the other, they want to enable a legal free-for-all right to attack corporations without restraint by removing the very right corporations to defend their reputations from false, dishonest or malicious campaigns by individuals or groups with their own agendas.
He goes on to say:
What the states also overlook is that in today’s business world, the reputation and integrity of the brand of a company is integral to its core value.
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